The Fed will meet in a week. Here’s What that Could Mean for Savings and CD Rates.

Takeaways

• Next Wednesday, the Fed will announce its interest rate decision. It’s almost certain that they’ll keep rates unchanged once again.
• Financial markets are pricing in rate cuts of at least 1 percentage point in 2025.
• The best savings rates tend to move in tandem with the federal funds rate. Therefore, we expect them to stay roughly constant for now.
• But CD rates can change in anticipation of Fed actions, so the prospect that rates will be cut could be enough to push the best CD rates down.
• That said, the economic outlook is very uncertain right now in light of President Donald Trump’s evolving tariff policy—making Fed rate forecasts more difficult than usual.

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What's Predicted From the Fed Next Week—and for the Rest of 2025

In the first two meetings of this year, the Federal Reserve held the federal fund rate at the current level. This was after a three-meeting rate cut between September and December of 2024, which lowered the benchmark by a full percentage. The Fed had previously held its key interest rate at an historic 23-year-high for 14 consecutive months.

The Fed’s committee for setting rates will meet again next Monday. CME Group’s FedWatch Tool shows that, while nothing is certain until Wednesday’s rate announcement, the central bank will likely hold the fed funds rate steady again.

Five more Fed rate-setting gatherings will take place in 2025 after the May gathering. According to CME Group’s year-end probabilities, traders are currently pricing about 75% of the odds that Fed rate cuts totaling at minimum 1 percentage point will be implemented by December 2025. This would most likely be four 0.25-point reductions, but the Fed can also make a bigger reduction at any meeting.

As for when the Fed's predicted rate reductions will arrive, markets are pricing in approximately 2:1 odds that the Fed will announce its first 2025 cut on June 18, with a quarter-point reduction. The majority of traders believe that the Fed will announce another quarter-point rate cut after its July 29-30 meeting.

Warning

We always warn that rate predictions for the future are not reliable. The Fed makes its rate decisions based on the most recent economic data. It’s even more true right now because the Trump administration could be pushing inflation rates up with its tariff policy.

How Next Week's Fed Announcement Is Likely to Affect Saving and CD Rates

We don’t expect savings account rates to change significantly in the near future, as the Fed is not expected to make any rate changes next week. Since banks and credit card companies can change their rates at any time, they often wait to lower rates until the Fed makes a move.

That said, there is no guarantee that the top savings account rate—currently 5.00% APY—will remain available, as any given offer can be adjusted at any time. We don’t expect that the likely Fed rate-hold next week will have a significant impact on the range of APYs in our ranking of high-yielding savings accounts.

CD rates behave a little differently. That's because CDs offer you not just a rate for today, but a rate promise for the future—and banks and credit unions don't want to get locked into paying CD rates they'll regret down the road. In order to avoid being locked into CD rates they’ll regret down the road, institutions often adjust their CD rates ahead of a Fed rate change, especially when confidence is high in a Fed decision.

What does this mean for the best CD rate next week? It depends on the Fed’s statement and what signals Fed Chairman Jerome Powell gives at his press conference after the meeting. If he indicates that central bankers may cut rates in June, some banks could lower their CD rates sooner.

But if the Fed indicates it will be in a wait-and-see-mode for longer than market expectations, that could keep CD rate generally where they are.

In any case, CD rate will probably see a gradual downward trend rather than something dramatic (barring the Fed making a dramatic move). As we've said, however, the outlook is very uncertain right now. How President Trump's tariff policy will impact inflation, economic growth, and—by extension— Fed monetary policy, remains to be seen.

Daily Rankings for the Best CDs, Savings Accounts and Investments

We update this ranking every day of the week to provide you with the best rates for deposits.

• Best 3-Month CD rates
• Best 6-Month Rates
• Best 1-Year CD rates
• Best 18-Month CD rates
• Best 2-Year Rates on CD
• Best 3-Year Rates on CDs
• Best 4-year CD rates
• Best 5-Year CD rates
• Best High-Yield Savings accounts
• Best Money Market accounts

It is important to note that

Note that the "top rates" quoted here are the highest nationally available rates Investopedia has identified in its daily rate research on hundreds of banks and credit unions. This is a much higher rate than the national average which includes all banks with a CD of that term. This includes many large banks who pay pittances in interest. The national averages will always be low, but the best rates can often be found by shopping around.

How to Find the Best CD Rates and Savings

Investopedia tracks daily the rates of more than 200 banks, credit unions, and savings accounts that are offered to customers across the nation. This data is used to determine the best-paying accounts. To be included in our lists, an institution must be federally backed (FDIC for credit unions, NCUA or FDIC for banks) and have a minimum deposit of $25,000 for the account. It cannot also specify a maximum amount of deposit that is below $5,000.

Nationally available banks must be present in at least 40 different states. Some credit unions may require you to donate $40 or more to a charity or association in order to join if you do not meet other eligibility requirements (e.g. you do not live in a particular area or have a specific job). Read our methodology to learn more about how we select the best rates.

Article Sources Investopedia asks writers to use primary resources to support their writing. White papers, government statistics, original reporting and interviews with industry professionals are all examples. We also use original research from other reputable publications when appropriate. Our website contains more information about the standards that we adhere to in order to produce accurate and unbiased content. Editorial policy

1. Federal Reserve Board. "Open Market Operations."

2. CME Group. "CME FedWatch Tool."